Bulls n Bears Daily Market Commentary : 25 January 2024

Fri Jan 26 03:59:04 CAT 2024

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Bulls n Bears Daily Market Commentary : 25 January 2024

ZSE commentary

 <https://www.dulys.co.zw/>  

All Share passes key level as investors pile into Delta

HARARE - Delta supported trading activity on Thursday as Zimbabwe Stock
Exchange shares continued their record advance.

The beverages producer, which has just released an upbeat trading update
showing strong revenue growth, made up 86% of the $10.59 billion turnover as
investors buy into the earnings potential of the company in light of ZWL
value erosion. A total of 2.74 million shares traded with Delta contributing
the most at 1.11 million. It was also the most active at 39 out of the 265
trades. The stock put on 5.99% to 818 360.68c with January gains of 133.20%
and market cap of $10.69 trillion.

Foreigners sold $564.9 million against purchases of $163.16 million. 

The All Share Index crossed a key level after gaining 5.25% to 413 257.58.
Market bias remained strongly positive as stocks remain a safe haven in the
face of rising economic uncertainty. The session yielded 18 risers against
seven fallers.

The Top Ten Index rose 4.78% to 187,270.93 as it doubled its gains in the
year to date. First Mutual advanced 14.98% to 159 000c in a low volume trade
of 400 shares. EcoCash Holdings put on 14.67% to 36 458.66c extending its
January gains to 106.94%

However, TSL dropped 4.08% to 115099.01c and Econet pared 0.64%.

The Medium Cap Index whose performance is currently trailing the wider
market, put on 6.20% to 1 429 224.07. Zimpapers led the risers, gaining
44.12% to 4 900c taking its market cap to $28.22 billion.

Four stocks in the constituency recorded 15% gains; NMBZ to 112 245c,
Proplastics to 149 500c, Dairibord at 171 670c and Meikles to 454 430c.
Meikles recently released a strong third quarter trading update, which
showed volume recovery on flagship supermarket segment and buoyant revenue
growth at its hotel.

Nampak was the worst performer, losing 12.99% to 37924.09c. Ariston shed
1.77% to 4 616.67c and fractional losses were recorded in Star Africa and
Zimre.

There was an improvement in VFEX turnover at US$193 037.32 anchored by
Innscor's 350 387-shares trade. Volume amounted to 2.03 million, the
majority of which came from First Capital at 1.65 million. The All Share was
0.83% higher to 98.48. African Sun led the risers, putting on 8.36% to 3.50
US cents and Innscor added 2.27% to 45 US cents. There were marginal losses
in Padenga and Zimplow of 0.29% and 0.25% respectively.-finx

Global Currencies & Equity Markets

South Africa

South African Rand coins are seen in this illustration picture

(Reuters) - South Africa's rand was steady on Thursday, little affected by
the central bank's decision to leave interest rates unchanged and the
release of data showing a slowdown in producer price inflation.

At 1558 GMT the rand traded at 18.8800 against the U.S. dollar , near its
previous close of 18.8825.

The South African currency strengthened on Wednesday after consumer
inflation fell for a second consecutive month to 5.1% year-on-year in
December.

The South African Reserve Bank (SARB) on Thursday kept its key lending rate
unchanged, saying it did not yet see a clear disinflation trend that would
justify cutting rates.

All 20 economists polled by Reuters forecast that the rate would be left
unchanged at 8.25%.

Analysts at Nedbank echoed sentiments shared by central bank governor
Lesetja Kganyago that the SARB would maintain a hawkish tone until inflation
edged closer to its preferred target of 4.5%.

"The upside risks to the inflation outlook... emanating from a vulnerable
rand and rising geopolitical tensions will drive the SARB to adopt a 'wait
and see' approach before commencing its cutting cycle," the analysts said in
a research note.

Producer price inflation (ZAPPIY=ECI), opens new tab for December slowed to
4.0% year-on-year in December from 4.6% in November, statistics agency data
earlier in the day showed.

On the stock exchange, the blue-chip Top-40 index (.JTOPI), opens new tab
closed more than 0.5% lower. South Africa's benchmark 2030 government bond
was little changed, with the yield down 0.2 basis point at 9.748%.

Nigeria

Nigeria's naira falls to new low in official trade, close to parallel rate

The currency of Africa's biggest economy fell as low as 1,398 naira to the
dollar, LSEG data showed

Nigeria's naira fell to a record low against the U.S. dollar on the official
market on Thursday, converging with the rate at which it trades on the
unofficial parallel market as foreign-currency shortages persist.

The currency of Africa's biggest economy fell as low as 1,398 naira to the
dollar, LSEG data showed, close the 1,400 per dollar level it was quoted at
in street trading.

The naira later recovered slightly to 1,299 naira per dollar on the official
market.

The naira's official exchange rate has been drifting towards the parallel
market level as the central bank struggles to clear outstanding forex
obligations owed in forward deals.

Central bank Governor Olayemi Cardoso said on Wednesday that the bank would
work to support the naira, which he said was undervalued, and was trying to
improve liquidity in the foreign exchange market.

 <mailto:info at bulls.co.zw> 

Global Markets

Canadian Dollar gets buoyed on Thursday's Crude Oil climb

The Canadian Dollar (CAD) found some bidders on Thursday even as the US
Dollar Index (DXY) saw a recovery after US Gross Domestic Product (GDP)
figures bolstered the broader market. 

Canada wrapped up its presence on the economic calendar's data docket this
week after Wednesday's rate statement from the Bank of Canada (BoC).
Canadian Dollar traders will be waiting until Canadian GDP figures are due
next Wednesday, while Canadian Purchasing Managers Index (PMI) figures are
slated for next Thursday.

Daily digest market movers: Canadian Dollar rebounds despite Greenback jump
on GDP beat

US data dominated the American market session on Thursday.

US Q4 GDP grew by 3.3% YoY, beating the forecast of 2.0% compared to the
previous quarter's 4.9%.

US Q4 Core Personal Consumption Expenditures (PCE) held steady at 2.0%.

US Initial Jobless Claims jumped to 214K for the week ended January 19, up
from the forecast of 200K and climbed from the previous week's 189K (revised
slightly up from 187K).

Despite a rebound on Thursday, the Canadian Dollar remains down across the
board for the trading week.

Crude Oil extends recent gains, bolsters Canadian Dollar.

West Texas Intermediate (WTI) tested above $76.00 for the first time in
2024.

The Bank of Canada (BoC) confirmed that the top is in for rate hikes on
Wednesday but remains mum on when rate cuts could be coming.

Canadian Dollar price today

The table below shows the percentage change of Canadian Dollar (CAD) against
listed major currencies today. Canadian Dollar was the strongest against the
Swiss Franc.

        USD   EUR   GBP   CAD   AUD   JPY     NZD   CHF

USD           0.37%         0.08%         -0.39%        -0.11%        0.11%
-0.02%        0.50%

EUR  -0.37%                 -0.27%        -0.76%        -0.50%        -0.26%
-0.40%        0.14%

GBP  -0.08%        0.28%                  -0.47%        -0.21%        0.03%
-0.12%        0.42%

CAD  0.39%         0.75%         0.48%                  0.26%         0.49%
0.35%         0.89%

AUD  0.13%         0.48%         0.20%         -0.28%                 0.22%
0.09%         0.61%

JPY    -0.10%        0.26%         -0.02%        -0.50%        -0.23%
-0.13%        0.39%

NZD  0.06%         0.39%         0.11%         -0.37%        -0.09%
0.14%                  0.52%

CHF  -0.51%        -0.14%        -0.42%        -0.90%        -0.62%
-0.39%        -0.53%        

The heat map shows percentage changes of major currencies against each
other. The base currency is picked from the left column, while the quote
currency is picked from the top row. For example, if you pick the Euro from
the left column and move along the horizontal line to the Japanese Yen, the
percentage change displayed in the box will represent EUR (base)/JPY
(quote).

Technical Analysis: Canadian Dollar finds some space against Greenback but
remains down overall

The Canadian Dollar (CAD) is broadly higher on Thursday, finding some room
in the green on the back of rising Crude Oil markets. The CAD is up around
nine-tenths of a percent against the Swiss Franc (CHF), the market's single
worst-performing currency on Thursday. The Loonie gained three-quarters of a
percent against the Euro (EUR) and nearly half of a percent against the
Pound Sterling (GBP) and the Japanese Yen (JPY).

The Canadian Dollar kicked off Thursday's trading session by testing 1.3530
against the US Dollar (USD) before catching a ride and sending the USD/CAD
back into the 1.3500 handle.

The USD/CAD is getting dragged into a technical congestion pattern on the
daily candles as the 50-day and 200-day Simple Moving Averages (SMA)
consolidate near 1.3500.

The pair is still up around 2.5% from December's low of 1.3177, but it will
take significant bidding pressure to force the pair into the high side of
the bearish crossover of the 50-day and 200-day SMAs.

What key factors drive the Canadian Dollar?

The key factors driving the Canadian Dollar (CAD) are the level of interest
rates set by the Bank of Canada (BoC), the price of Oil, Canada's largest
export, the health of its economy, inflation and the Trade Balance, which is
the difference between the value of Canada's exports versus its imports.
Other factors include market sentiment - whether investors are taking on
more risky assets (risk-on) or seeking safe-havens (risk-off) - with risk-on
being CAD-positive. As its largest trading partner, the health of the US
economy is also a key factor influencing the Canadian Dollar. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold, silver near unchanged price levels after upbeat U.S. data

(Kitco News) - Gold and silver prices are near steady levels in midday U.S.
trading Thursday, following a big batch of U.S. economic data highlighted by
a GDP report that showed a steadily growing economy. February gold did hit a
five-week low today. February gold was last down $1.50 at $2,014.30. March
silver was last down $0.039 at $22.85.

In the last quarter of 2023, the U.S. economy expanded at an annualized rate
of 3.3%, surpassing market expectations of a 2% increase. This growth
followed a 4.9% rate in the previous quarter (Q3), as indicated by the
advance estimate. When considering the entire year of 2023, the U.S. economy
registered a growth rate of 2.5%, a notable improvement compared to the 1.9%
growth observed in 2022. These figures closely align with the Federal
Reserve's estimates of 2.6% growth for the year 2023.

Of note, U.S. Treasury Secretary Janet Yellen is in Chicago today, where
she's scheduled to deliver what the administration is calling a "major"
address on the economy and President Joe Biden's domestic agenda. "Though
some forecasters thought a recession last year was inevitable, President
Biden and I did not," Yellen will say in prepared remarks. "Instead of
contracting, the economy has continued to grow, driven by American workers
and President Biden's economic strategy. It now produces far more goods and
services than it did before the pandemic."

Meantime, the European Central Bank (ECB) decided to maintain its key
interest rates at their multi-year highs for the third consecutive meeting
in January. This decision aligns with market forecasts. The ECB cited the
ongoing decline in underlying inflation and the continued strong impact of
previous interest rate hikes on financing conditions as reasons for this
decision.

The S&P 500 and Nasdaq stock index futures are higher and near this week's
record highs at midday. Risk appetite in the general marketplace has
up-ticked recently. Rallying stocks are a negative for the precious metals
markets, as equities are a competing asset class.

Part of the better risk appetite is due to China easing its monetary policy
this week. Wednesday's surprise 50 basis point reserve requirement ratio cut
for banks in China "has seen buyers step into an illiquid market on
expectations of a revival in construction activity," said broker SP Angel
today.

The key outside markets today see the U.S. dollar index higher. Nymex crude
oil prices are higher and trading around $76.50 a barrel. Meantime, the
yield on the benchmark U.S. Treasury 10-year note is presently fetching
around 4.15%.

Technically, February gold futures prices hit a five-week low today. The
bulls have the overall near-term technical advantage but have faded
recently. A three-month-old uptrend on the daily bar chart has been negated
and prices are now trending down. Bulls' next upside price objective is to
produce a close above solid resistance at $2,050.00. Bears' next near-term
downside price objective is pushing futures prices below solid technical
support at $2,000.00. First resistance is seen at today's high of $2,025.60
and then at this week's high of $2,039.30. First support is seen at today's
low of $2,004.00 and then at $2,000.00. Wyckoff's Market Rating: 6.0.

March silver futures bears have the firm overall near-term technical
advantage. A six-week-old downtrend is in place on the daily bar chart.
Silver bulls' next upside price objective is closing prices above solid
technical resistance at $24.00. The next downside price objective for the
bears is closing prices below solid support at the October low of $21.17.
First resistance is seen at today's high of $23.155 and then at $23.50. Next
support is seen at Wednesday's low of $22.465 and then at $22.00. Wyckoff's
Market Rating: 3.5.

March N.Y. copper closed down 95 points at 387.65 cents today. Prices closed
near mid-range and hit a three-week high today. The copper bulls have
regained the slight overall near-term technical advantage. A price downtrend
on the daily bar chart has been negated. Copper bulls' next upside price
objective is pushing and closing prices above solid technical resistance at
the December high of 397.40 cents. The next downside price objective for the
bears is closing prices below solid technical support at the January low of
371.45 cents. First resistance is seen at today's high of 389.35 cents and
then at 393.30 cents. First support is seen at 383.00 cents and then at
380.00 cents. Wyckoff's Market Rating: 5.5. 

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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for guideline purposes only and sourced from third parties.

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